Personal bankruptcy is never the preferred predicament to be in, however many individuals find relief in dealing with their financial issues and starting over. Nobody is perfect, and people make mistakes. Yet too many individuals avoid filing for bankruptcy for far too long. They choose to ignore the elephant in the room and spend several years fighting just to make ends meet. Yes, bankruptcy is never pleasant and many people find it embarrassing, nevertheless it is the very first step towards financial freedom. Always bear in mind that there is a life after bankruptcy.

If you’re struggling financially and contemplating bankruptcy, it’s relevant to recognise the warning signs. Here are a couple of signs that you’re in serious financial distress.

 

Making minimum repayments only

 

One of the clearest signs of financial challenges is when you can only afford the minimum repayments on your loans, yet your salary isn’t increasing. Interest charges and fees will eventually force you to make a change, either by getting a second job or consolidating your loans. And if you don’t make a change, something must give eventually. Surely, it’s fine to have a balance on your credit card debt for a few months, but it’s crucial that you think long-term. If you’re sinking in interest fees and can only afford to make the minimum repayments, it’s time to make a change.

 

No savings

 

If you’re living paycheck to paycheck and realise that your savings are being used to make repayments on your loans, you’re heading for trouble. A large number of financial experts suggest having three to six months of living expenses in a dedicated savings account. This account should cover all of your expenses for that period: rent, food, petrol, bills. What happens if you lose your job? Or you can’t work as a result of illness? And if you’re buying luxury items while you have high interest loans overdue, you should really get your priorities straight. Without three to six months of living expenses in your savings account, personal insolvency may well become a reality.

 

Using credit cards to pay your bills.

 

Credit Cards are a practical way to purchase items by giving yourself a short-term loan, particularly in today’s cashless society. Ordinarily, there is an interest-free period of a month or two, but after this time, the interest rates and charges are extremely high. If you find yourself using credit cards to pay for bills given that you simply don’t have enough savings, you’re on the brink of disaster. Some people will even have numerous credit cards so they can pay off one with another. This is a key sign that you’re looking at personal bankruptcy. Credit cards can be considerably harmful if used incorrectly. Paying bills with debt only results in more debt, with big interest charges added on. If this sounds familiar, seek professional advice immediately.

 

Debt collectors are calling you

 

It may appear to be obvious, but if debt collectors are continually harassing you on the phone or in the mail, you should think about bankruptcy help. Imagine it this way; lenders who believe that they aren’t able to recuperate their loan from you will sell your debt at a lower rate to debt collectors. If creditors have lost faith in your capacity to pay your bills, there is unquestionably a problem. If you’re scared to answer the phone or open your mail because of debt collectors, it’s time to act. You can only brush off those threatening phone calls and letters for so long before your quality of life starts to suffer. Pick up the phone and call the specialists, that’s what they’re there for.

 

Losing sleep

 

Are you so nervous about your financial future that you can’t sleep at night? This is possibly the biggest warning sign that you’re moving towards bankruptcy. When your health and happiness are diminishing due to your financial position, it’s time to recognise that you need help simply to improve your quality of life. Bankruptcy is not the end of the world, and is, in truth, the first step towards financial freedom. Speak to a bankruptcy expert to discover what options you have.

 

If you’re encountering any of these warning signs, chances are that you’re currently in financial hardship and are heading towards bankruptcy if changes aren’t made. Personal insolvency is the final step in a long process, and normally there are options before you need file for bankruptcy. To find out what options you have, or to speak to someone about your circumstances, contact Bankruptcy Experts Adelaide on 1300 795 575 or visit http://www.bankruptcyexpertsadelaide.com.au